February 29, 2016 / 12:26 PM / 2 years ago

Icahn offers to buy rest of Federal-Mogul to boost auto business

Billionaire activist-investor Carl Icahn gives an interview on FOX Business Network's Neil Cavuto show in New York February 11, 2014. REUTERS/Brendan McDermid

(Reuters) - Billionaire Carl Icahn’s investment company offered to buy the 18 percent of auto parts maker Federal-Mogul Holdings Corp FDML.O that it did not own for about $213 million, as it focuses on growing its auto business.

Federal-Mogul said on Monday Icahn Enterprises LP (IEP.O) offered to pay $7 per share in cash, sending the company’s stock soaring nearly 41 percent to $7.02 in premarket trading.

The latest investment from Icahn Enterprises, whose auto business was its second largest by revenue in 2014, comes after a record year of U.S. auto sales and in the same month it closed the acquisition of Pep Boys-Manny Moe & Jack, another U.S. auto parts retailer.

While slumping crude oil prices have helped boost auto sales, and so Icahn Enterprises’ auto business, they have hurt the company’s energy business, which accounted for nearly half of 2014 revenue.

Icahn Enterprises’ offer values Federal-Mogul at about $1.2 billion, based on the company’s shares outstanding as of Sept. 30.

Federal-Mogul said its board would appoint a special committee to review the offer.

The company also reported a smaller quarterly loss, as the acquisition of an engine valve maker and strong aftermarket sales in the United States and Canada helped offset the impact of a strong dollar.

The loss attributable to Federal-Mogul fell to $58 million, or 36 cents per share, in the fourth quarter ended Dec. 31, from with $185 million, or $1.24 per share, a year earlier.

Excluding restructuring charges, the company earned 22 cents per share.

Sales inched up 0.2 percent to $1.80 billion.

Reporting by Ankit Ajmera in Bengaluru; Editing by Saumyadeb Chakrabarty and Savio D'Souza

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